(Feb 14): Current attention is focussed on the newly named Covid-19 coronavirus. Coverage ranges from the realistic to the hyperbolic so it is easy for investors to lose track of the underlying and long-lasting impacts. Now is the time to consider portfolio rebalancing and that does not mean chasing high-flying biomedical stocks. Rebalancing means adjusting exposure to long-term assets that will continue to be impacted by this virus outbreak. The gaming rooms at Marina Bay Sands are at immediate risk, but the legal and semi-legal online gaming portals will take up the slack – perhaps on a more permanent basis.

Exposure to airports and airport services calls for a reduction by cashing out and waiting for a recovery entry point in a few months’ time. Banning flights to and from China has been an easy step but the potential to ban cargo ships from travelling to and from China is a much more difficult process. If Japan refuses to allow cruise ships to dock because they have coronavirus cases on board among passengers and crew, then what happens when a container ship arrives with infected crew members?

This is a dilemma waiting to happen. The impact on PSA (formerly Port of Singapore Authority) traffic, on shipping and logistics companies will be substantial because vessels can be effectively taken out of the logistics chain and, like plague-ships of old, denied docking access.

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